Play Turner’s Take Podcast Episode 201
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New Podcast!
This week we go over our thoughts on the stock market and why we like having exposure to the S&P 500.  We go over why corn and soybeans still have 25 to 50 cents of weather/yield premium due to frost and harvest risk.  Rallies in the grain and oilseeds are marketing opportunities for next year.  Take a listen to Turner’s Take Podcast for more details
Macro Markets
The big story of the day has been the possible impeachment of President Trump.  For the purposes of this newsletter, we only care how it changes the markets. Right now the stock market is shrugging it off as the odds are low the President gets impeached. I think any significant sell off because of impeachment news is going to be bought.
CNBC | Wall Street believes Trump is safe but worries impeachment inquiry could hinder trade deals
I still like being long the stock market.  We will be looking to buy the S&P 500 on breaks. I detail our strategy at length at the end of this week’s podcast.  Feel free to call or email me about it.
Continuous Emini S&P 500

Grains & Oilseeds
China has given new waivers to several importers to buy as much as 5 to 6 million tons of soybeans.  This is considered a goodwill gesture ahead of high-level trade talks next month.  Soybeans are lower this morning due to the weather models reducing the frost risk in the Oct 4th/5th time frame.  Frost is still a risk and the forecasts can change any time, and that is probably why we are only down 5 cents in soybeans.  China did buy 581,000 metric tons of soybeans yesterday (announced this morning) but that purchase was expected as the US and China head into high level trade talks.
With old crop stocks at 1 billion and new crop at 600mm, you can make the case there about 30 to 50 cents of weather/yield risk premium in soybeans.  With corn old crop stocks at 2.4 billion and projected new crop at almost 2.2 billion, corn has at least 25 cents of weather/yield risk premium too.
The markets will be choppy heading into the Sept 1 Quarterly Stocks report.  The funds are short so the bias should be higher into the weekend due to light short covering.  Dec 2019 corn needs to close above $3.81 for the market to move the next leg higher.  Nov Soybeans should meet stiff resistance at $9.20.
Dec 2019 Corn

Nov 2019 Soybeans

Livestock
Trump came out today and said China will be making large purchases of US red meats.  Traders will believe it when they see it.  Cattle is technically overbought and Dec LC is right at the 50-day moving average.  A close above 108 suggests we could rally to 100-day moving average of 109.50.  The gap target is 111.00.  Long term cattle looks bullish into Q1 of 2020.  The loss of the Tyson plant will be rectified, the world will need protein to replace the pork losses from ASF, and winter is seasonally a bullish time for cattle.  Dec Lean Hogs are also trying to close over a resistance point at 71.250.  If hogs can rally further the next major resistance on the charts is 80 basis Dec 19
Dec Live Cattle

Jan Feeder Cattle

Dec Lean Hogs

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If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!